Discussion on future of EU financing (2014-2020) in full swing

BUDG Press release - Budget − 21-10-2011 - 14:49

A unique debate on the future financing of the European Union was held in Brussels on Thursday and Friday. It brought together representatives of parliaments, governments and NGOs from all EU Member States, the Polish Presidency, the European Commission and the European Parliament.

The debate focused on three topics: the future of EU "own resources", spending priorities for the future and how to get maximum value from every euro spent from the EU budget..

The conference was prompted by legislative proposals for the EU's new "own resources' and the multiannual framework (MFF), as tabled by the European Commission on 29 June.

President Buzek: Better respond to crises

In his opening speech, in the presence of European Commission President José Manuel Barroso and Polish Prime-Minister Donald Tusk, European Parliament President Jerzy Buzek strongly defended the merits of the common EU budget. "We need to be able to respond better to future crises. To create jobs, we need to ensure growth, competitiveness and a strong internal market with good transnational infrastructure. For that we need a solid EU budget. [...] Every euro spent from the common budget lessens the burden on national budgets. Money spent by the EU is money well spent".

Danish Presidency to hold a follow-up conference

At the closing session on Friday, Mr Lamassoure said: "On the issues of the MFF and own resources EU institutions and Member States share competences and roles. I hope this event will become an example for dealing with issues of such European dimension. This conference shows that joint reflection in a public debate is helpful."

President Buzek and Budgets Committee chair Alain Lamassoure (EPP, FR), asked that another conference, involving all parties, be held to facilitate the "conclusions of negotiations on both own resources and the MFF as soon as possible, hopefully by the end of 2012",

Danish Minister for European Affairs, Nicolai Wammen embraced the idea, confirming that this conference would be held under the EU's Danish Presidency in the first half of next year.

Spending priorities for the future

Participants agreed that procedures for granting EU funding to regional policy projects must be simplified, as some potential beneficiaries just give up due to complexity of the rules and the administrative burden it creates.

"The challenge is not spend more, but to spend better. Resources should be better prioritised", said Peder Lundquist, the Danish Deputy Secretary for the EU budget and the MFF. He called for more "honesty" in EU spending: "If programmes do not deliver it is better to stop them", he said calling for more systematic data on "what works and what does not".

Regional Policy Commissioner Johannes Hahn called the Commission proposal "ambitious and balanced" in the light of the discussions in the Council and European Parliament. He stressed that that the current crisis cannot be overcome without creating jobs in the long run. Many agreed, but some participants called for a freeze or even cuts in the EU budget, in the light of austerity measures taken in Member States.

Mr Hahn said the challenge for EU spending lies in finding the right balance between spending at European, national and local levels.

Parliament's rapporteur for the MFF, Mr Reimer Böge (EPP, DE) called for strong involvement of the European Parliament, stressing that the report by Salvador Garriga (EPP, ES) is still Parliament's position. Mr Böge said that he could not contemplate an agreement without a breakthrough on own resources. He also called for flexibility within the budgets so as to be able to anticipate on new circumstances.

New own resources for the EU Budget

The current EU revenue system is "extremely complex and incomprehensible to EU citizens" and should be reformed "to increase citizens' interest in what they pay for", said Guy Verhofstadt (ALDE, BE), chair of the panel on the future of EU own resources, opening the debate.

MEPs and MPs from several national parliaments agreed on the need to overhaul the current system of resources for the EU budget, but differed on how to proceed. The Commission proposal to introduce new EU own income resources such as a financial transactions tax (FTT) and a new VAT system, was generally welcomed, although many speakers raised doubts on how the proposal could be put into practice.

Some speakers said that the purpose and likely impact of the FTT on the EU financial sector was not yet clear and should be investigated further, while others said it should be agreed globally, not only at EU level.

Concerns were also voiced that the proposed new VAT system would increase the overall tax burden, which the vast majority of speakers said should be carefully avoided.

Mr Lamassoure, who was also Parliament's rapporteur on own resources, said: "Now is the time for radical reform, to give substance to the EU Treaty provision that expenditure is to be financed by EU own resources, meaning tax resources."